US inflation slows down, Trump urges the Federal Reserve to cut interest rates again

Source: TokocryptoBlog Original Title: US Inflation Eases, Trump Urges The Fed to Cut Interest Rates Original Link: President Trump of the United States, following the release of the latest inflation data, has once again urged the Federal Reserve to quickly lower the benchmark interest rate. The December Consumer Price Index (CPI) in the US showed an annual inflation rate of 2.7%, in line with market expectations.

Trump stated on social media that this inflation data is “very good” and called for Fed Chair Powell to significantly cut rates. Trump believes the Fed’s response to economic conditions is too slow, warning that delaying rate cuts could hinder economic growth and keep borrowing costs high.

December CPI Data Analysis

The December CPI report indicates that inflation remains stable with no signs of acceleration. The core CPI, which excludes food and energy prices, increased by 2.6% annually, below market expectations. These data further reinforce the view that US price pressures are gradually easing.

Trump views these figures as evidence of the Fed’s “lagging” in monetary policy. He insists that rate cuts are necessary to promote economic growth and boost credit demand. Trump also claims that his tariff policies have strengthened domestic production without triggering a surge in inflation.

The market responded positively to the inflation data release. Bitcoin’s price surged, briefly surpassing $92,000, reflecting increased risk appetite among investors and heightened expectations for future rate cuts. Overall, lower interest rates are believed to increase liquidity, boosting risk assets such as stocks and cryptocurrencies.

Possibility of Fed Rate Cuts

Nevertheless, the market considers the likelihood of the Fed cutting rates in the near term to be low. According to CME Group’s FedWatch Tool, the probability of the Federal Open Market Committee (FOMC) maintaining rates at the January meeting is about 95%. The chance of a 25 basis point rate cut remains very low.

The latest FOMC minutes show that policymakers remain cautious, seeking more evidence to confirm that inflation is indeed on a sustainable decline. Several institutions, including a major bank, no longer expect rate cuts in the near future even if inflation data weakens.

Additionally, uncertainties surrounding fiscal and tariff policies have attracted the attention of Fed officials, who want to assess the impact of these factors on inflation over the coming months. Although Trump’s comments often influence market sentiment, the Fed has so far maintained independence in setting monetary policy direction.

If inflation remains stable or continues to decline, expectations for rate cuts could strengthen in the second half of the year. The latest CPI data has now become a key argument supporting a looser US monetary policy.